ML20046A982

Informs Commission of Reviews of Nuclear Power Reactor Licensee Requests for Decommissioning Fund Withdrawals Pending Reexamination of Decommissioning Funding Requirements

ML20046A982
Person / Time
Issue date:	05/18/1993
From:	Taylor J NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
To:
References
SECY-93-137, NUDOCS 9308020193
Download: ML20046A982 (13)

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RELEASED TO THE PDR.

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gagj,e s..m POLICY ISSUE May 18, 1993 (Notation Vote)

SEcy-93-137 FOR:

The Commissioners FROM:

James M. Taylor Executive Director for Operations l

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SUBJECT:

USE OF DECOMMISSIONING TRUST FUNDS BEFORE DECOMMISSIONING PLAN APPROVAL PURPOSE:

To inform the Commission of staff reviews of nuclear power reactor licensee requests for decommissioning fund withdrawals pending the reexamination of decommissioning funding requirements requested by the Commission in a Staff Requirements Memorandum, COMIS-93-002, " Reexamination of NRC Decommissioning Funding Requirements for Reactor and Major Fuel Cycle Facilities," March 30, l

1993, and to request approval of the criteria developed by the staff to

'l evaluate these requests.

BACKGROUND:

In a Staff Requirements Memorandum (SRM) dated January 14, 1993, the Commission provided guidance that would enable the staff to permit certain early component removal activities, and directed the staff and OGC to " provide an analysis and recommendation to the Commission on permitting licensees to 4

use their decommissioning funds for decommissioning activities prior to approval of the decon,.issioning plans." This SRM addressed 0GC recommendations contained in SECY-92-382, " Decommissioning -- Lessons Learned" (November 10, 1992).

In this paper, OGC stated that l

it is not clear that any actions prior to approval of a D-Plan

[ decommissioning plan], consistent with the license and 10 CFR S 50.59, could adversely affect the safety of eventual decommissioning so long as decommissioning funds are not used to pay for these interim activities...

This restriction on the use of decommissioning funds would avoid the possibility of squandering funds prior to D-Plan approval.

(SECY-92-382, pp. 25-26.)

930B020193 930S18 PDR SECY PDR NOTE:

TO BE MADE PUBLICLY AVAILABLE 93-137 WHEN THE FINAL SRM IS MADE AVAILABLE Contacts:

Robert Wood, NRR 504-1255 Mitzi Young, OGC i

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504-1523

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DISCUSSION:

Issues concerning the oversight of the use of decommissioning funds are matters that should be considered as part of the general review requested by the Commission in "COMIS-93-002 -. Reexamination of NRC Decommissioning Funding Requirements for Reactor and Major Fuel Cycle Facilities," dated March 30, 1993. Until such a review is carried out, the questions posed by the January 14, 1993, SRM remain relevant to facilities currently undergoing decommissioning and any facility that may be permanently shut down in the near future.

The following addresses the Commission's questions in the January 14, 1993, SRM in terms of currently shut down facilities.

If a licensee spends decommissioning trust funds on legitimate decommissioning activities, the timing of these expenditures, either before or after NRC approves a licensee's decommissioning plan, should not adversely affect public health and safety, provided adequate funds are maintained to restore the facility to a safe storage configuration in the event of unexpected interruptions of decommissioning activities.' Consequently, the timing of the NRC review of a licensee's decommissioning plan in relation to trust fund withdrawals is not as important as the purpose of those withdrawals.

In its decommissioning plan reviews, the staff evaluates proposed licensee activities in the planned decommissioning process to determine whether the

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proposed plan adequately assures protection of public health-and safety. We will also assess a licensee's overall decommissioning fund balance in relation 1

to total cost. The staff review of decommissioning costs is directed to seeing that they fall within a normal range of costs and is not directed to an examination of the timing, scope and the cost of specific component removal or i

other decommissioning activities.

Therefore, although the staff believes that i

it should guard against misuse or waste of decommissioning trust funds by licensees, it is not clear that prior staff review of the decommissioning plan would identify such misuse or waste unless it resulted in costs far higher than would be normally expected. The staff would find it difficult to identify the misuse of funds if a licensee's estimates were within a reasonable range of the costs estimated for similar facilities.

Further, the

'In a letter to the Commission dated November 25, 1992, Yankee Atomic Electric Company (YAEC) stated its intention to use its decommissioning trust funds to remove reactor core internals, steam generators and the pressurizer from Yankee howe before the NRC approves YAEC's decommissioning plan.

(YAEC intends to submit its decommissioning plan for staff review in late 1993.)

YAEC has over $70 million in its external decommissioning trust fund and has committed to obtaining the remaining funds needed to complete Yankee Rowe's decommissioning.

YAEC projects that trust fund assets will continue to grow to nearly $200 million by 1999 and that growth will occur in 1993 and 1994

.despite withdrawals from the fund to pay for the proposed component removal.

By letter dated April 16,1993 (Enclosure 1), the staff permitted YAEC's proposed use of decommissioning trust funds before staff approval of the Yankee-Rowe decommissioning plan, using criteria consistent with those discussed in this paper, although the review of the last criterion listed will l

be completed prior to the projected September 1993 shipment of the components.

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staff does not cupervise or review the actual expenditure of funds during-decommissioning and would not have an opportunity to identify serious cost overruns which might jeopardize the adequacy of funding available for remaining decommissioning activities.

However, there-appears to be little motivation for utilities to misuse these j

funds. Most NRC power reactor licensees are subject to rate regulation by_

l State public utility commissions (PUCs) or the Federal Energy Regulatory Commission (FERC). Utilities are normally allowed to earn a return on assets, 1

including nuclear plants, once they are determined to be "used and useful" and placed in the rate base. Decommissioning costs, however, are normally treated by PUCs and FERC as non-rate-base expenses.

They are passed on to ratepayers as expenses, but the utility and its stockholders do not earn a return on these collections.

Consequently, there is little financial incentive for a j

licensee to " pad" or dissipate collected decommissioning funds to increase the rate base, because the stockholders would not benefit.

- i Further, the PUCs and FERC are unlikely to allow utilities under their jurisdictions to squander funds obtained from ratepayers.

Rate regulators hold prudency reviews to determine whether utilities have spent funds properly t

throughout all aspects of plant operation, from initial planning to final decommissioning.

The staff expects that PUCs and FERC will continue to exercise their oversight of utilities' expenditures, including those being paid from decommissioning trust funds, throughout the decommissioning process, t

A utility has an incentive to spend decommissioning funds prudently if it knows that its stockholders will be liable for decommissioning costs in excess of those already collected from ratepayers.

The NRC decommissioning regulations in 10 CFR 69 50.75 and 50.82 are silent on whether approval of the decommissioning plan must precede withdrawals from the decommissioning trust fund.

Regulatory Guide 1.159, " Assuring the Availability of Funds for Decommissioning Nuclear Reactors," contains sample trust language that indicates that the fund trustee should only release funds upon certification "that decommissioning is proceeding pursuant to an NRC-approved plan" (RG 1.159, Appendix B.3.1, p. B-12).

However, not all licensees have used this sample language. When the staff evaluated trust funds as part of the initial certification required by 5 50.75(b) and submitted in July 1990, it found trusts acceptable if, along with other i

provisions, the trusts contained language limiting trust fund withdrawals to legitimate decommissioning purposes. Thus, many licensees have acceptable trusts that nevertheless do not expressly limit the withdrawal of trust funds before NRC approval of a decommissioning plan.

l Although NRC staff approval of the decommissioning plan does not assure prevention of misuse or waste of decommissioning funds, the staff believes that withdrawal of funds for decommissioning activities before a decommissioning plan is developed and approved should require NRC review.

This is consistent with item 3 in the January 14, 1993, SRM, which prcvides, "The staff may permit licensees to use their decommissioning funds for the decommissioning permitted above (as the term " decommission" is defined in 10 CFR 50.2), notwithstanding the fact that their decommissioning plans have not yet been approved by the NRC."

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CRITERIA:

The criteria developed by the staff to implement this directive and the supporting rationale are as follows:

The withdrawals are for expenses for legitimate decommissioning activities as defined in 10 CFR 50.2 that would necessarily occur under most reasonable decommissioning scenarios.

Section 10 CFR 50.2 defines " decommission" as meaning "to remove (as a facility) safely from service and reduce residual radioactivity to a level that permits release of the property for unrestricted use and termination of licensee."

This criterion asks a licensee to demonstrate that the early withdrawal is for -

activities that would occur under reasonable decommissioning scenarios and would prevent funds being used for activities that do not reduce radioactivity at the site and ultimately permit release of the property for unrestricted use. A licensee that has already prepared its 550.82 decommissioning plan (which must be submitted within two years after a permanent cessation of operations) could reference the appropriate part of this plan.

A licensee that has not yet completed its 550.82 decommissioning plan would have to provide other documentation to demonstrate that its proposed activities were clearly decommissioning activities.

(For example, YAEC proposed to use decommissioning trust funds to remove core internals, steam generators and the pressurizer from Yankee-Rowe before NRC approval of the decommissioning plan.

Because these components are all radioactively contaminated, their removal falls within decommissioning activities as defined in 10 CFR 50.2.)

The expenditures would not reduce the value of the decommissioning trust below an amount necessary to place and maintain the licensee's reactor in a safe' storage (SAFSTOR) condition if unforeseen conditions or expenses arise.

(For example, if the waste shipments were rejected by the disposal site due to lack of storage space or legal impediments, a licensee would have to show it has the funds to return and store any affected components onsite and to store any radioactive components and materials that had remained onsite.)

Consistent with the purpose of the decommissioning funding regulations, assurance of availability of funds to safely decommission a facility, and the SRM directive that a pre-approval activity does not "(a) foreclose the release of the site for possible unrestricted use," this criterion asks a licensee to show that it can maintain the status quo at a facility and that the proposed activities will not preclude the ultimate unrestricted use of the site.

A licensee would have to document the rationale for the minimum amount estimated to be needed to return to a safe storage condition if decontamination or-removal activities are interrupted and the components or equipment involved have to be stored safely at the site.

Such onsite storage Efter shipment could, in the worst case, require construction of a storage facility, This criterion assures that decommissioning activities that occur before approval of the f 50.82 decommissioning plan do not reduce funds below a level which would assure continued maintenance of safety at a defueled, shutdown facility i

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l until the decommissioning plan is. reviewed and approved. A licensee could i

satisfy this criterion by demonstrating that it has~ sufficient funds either in.

its decommissioning fund or other available funds to maintain the status quo-at the facility, i.e., maintain safety in the defueled, shutdown condition.

It should be noted that this criterion is also pertinent to the normal, end-of-life decommissioning; licensees are to accommodate the possibility of unforeseen occurrences by providing for contingencies. See Regulatory Guide 1.159 at 1.159-10, Item 1.4.4.3.

The general guidance' of Regulatory l

Guide 1.159 concerning provisions for " contingencies," however, does not.

i explicitly identify the nature of such contingencies.

The staff's proposed criterion is more explicit.

The staff notes that '0 CFR 50.82(c)(1) requires, " Funds needed to complete 1

decommissioning be placed into an account segregated from licensee assets and outside the licensee's administrative control during the storage or surveillance period, or a surety method or fund statement of intent be maintained in accordance with the criteria of E 50.75(e)..." Because decommissioning expenses are defined in s 50.2 to include the costs-of placing and maintaining a reactor in safe storage, a licensee should continue to provide assurance of adequate funds for these expenses at all. times during the SAFSTOR period.

Thus, the' staff believes that licensees are required to maintain this assurance both before and after the NRC approves a~ licensee's 550.82 decommissioning plan.

The withdrawals would not inhibit the ability of the licensee to complete funding of any shortfalls in the decommissioning trust needed to assure availability of funds to ultimately release the -

3 site for unrestricted use.

f This criterion encompasses requirement 2(b) in the January 14, 1993, SRM that' activities allowed before approval of the decommissioning plan "do not significantly increase decommissioning costs." A licensee would be required to document the effect of the withdrawals on the decommissioning funding plan, t

addressing the current fund balance and collection schedule,;and demonstrate that the use of funds before NRC appron1 of a decommissioning plan for the facility would not impair the licensee's ability to fully fund the plan submitted to the NRC (or, if no plan has been filed, the actions necessary to permit release of the site for unrestricted use).

A licensee would, for example, have to show that the decommissioning actions potentially taken out of sequence of any decommissioning plan submitted (or reasonable decommissioning alternatives if no plan has been submitted) would not significantly increase decommissioning costs or impair its ability to obtain the funds necessary to complete decommissioning.

As provided in item 2 of the January 14, 1993, SRM, licensees, prior to the approval of a decommissioning plan, can be " allowed to undertake any decommissioning activity (as the term " decommission" is defined in 10 CFR 50.2) that does not--(a) foreclose the release _

- I of the site for possible unrestricted use, (b) significantly increase. decommissioning costs, (c) cause any significant environmental impact not previously reviewed, or (d) violate the.

l terms of the licensee's existing license (e.g., OL,.0L, OL with l

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confirmatory shutdown order, etc.) or 10 CFR 50.59 as applied to the existing license."

This criterion seeks.to ensure that funds are only used for those decommissioning activities that would be allowed to proceed prior to approval of a decommissioning plan.

Items (a) and (b) of this Commission guidance have already been addressed by this paper. Consistent with the SRM for items (c) and (d), a licensee and the NRC staff would evaluate the proposed activity to assure that the activity may proceed under the current license and that the proposed activity will not result in any significant environmental impact not previously reviewed.

As stated above, the SRM of January 14, 1993, provides that "[t]he staff may permit licensee to use their decommissioning funds for the decommissioning permitted above (as the term " decommission" is defined in 10 CFR 50.2),

i notwithstanding the fact that their decommissioning plans have not yet been approved by the NRC."

After review of the licensee's proposed activities and fund withdrawal using the above criteria, the staff could permit the licensee to use decommissioning funds and to undertake the proposed activities either by:

(1) issuing, if appropriate, a written approval authorizing the licensee to withdraw funds from the decommissioning trust for approved purposes; or (2) tacitly consenting to the proposed withdrawals by not interposing, within a t

specified time, an objection to the licensee's proposal. The staff believes e

that it would need 60 days to complete an effective review of a licensee's proposal and justification of how the above criteria will be met.

The staff believes it is more appropriate to provide tacit consent rather than formal approval, for two reasons.

First, the regulations do not expressly require nor has the staff required a licensee to obtain formal approval for decommissioning trust fund withdrawals.

If a licensee makes inappropriate withdrawals at any time, from before plant shutdown to after the NRC approves the licensee's 550.82 decommissioning plan, the licensee would be subject to NRC enforcement action after the fact, rather than be required to obtain formal approval before it made such withdrawals.

It would be inconsistent with this regulatory scheme to require approval of fund withdrawals only during one stage of a plant's operation or decommissioning.

Second, by issuing a formal approval, the NRC would arguably be taking a " licensing" action that could be subject to a hearing and would require an environmental review.

Because no additional health and safety benefit appears to' result from this approach, the additional resources required do not appear to be justified.

In addition, the staff proposes to use this tacit consent approach for the activities themselves rather than issuing a letter approval as was i

done in the case of Yankee Rowe.

ANCILLARY ISSUE:

In the past, licensees have asked the staff informally whether they would be able to withdraw funds from their trusts to pay for developing the 550.82 decommissioning plan and for other post-shutdown administrative expenses. The staff believes that these withdrawals should be allowed before the NRC approves the final decommissioning plan, provided the licensee meets the following ccnditions:

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(1)

The sum of withdrawals for such purposes should be dg minimis, that is, less than $5 million dollars.2 (2)

The decommissioning trust balance would not fall below an amount needed for safe storage.

(3)

The licensee provided for these costs in its site-specific decommissioning cost estimate and increased its overall trust fund balances accordingly.

RESOURCE IMPACTS:

If these policy recommendations are adopted, there should be minimal impact on NRC resources.

First, the staff does not expect that most licensees will choose to make early withdrawals from their decommissioning trusts.

(YAEC's incentive for early component removal is the short-term availability of low-level waste disposal capacity at Barnwell. Due to the announced 1994 closure of Barnwell to waste nutside its low-level waste compact area, the conditions favoring early component removal may be short-lived.) Second, those that choose to make early withdrawals will submit certifications and accompanying documentation that will require only minimal staff review.

Thus, no significant commitment or reprogramming of NRC resources is projected.

RECOMMENDATIONS:

That the Commission:

1.

Acorove the proposed criteria that the staff would use to determine whether to permi' licensees to withdraw funds from their decommissioning trusts before the NRC approves licensee 5 50.82 decommissioning plans.

2.

Acorove the proposed criteria for allowing certain dg minimis withdrawals for decommissioning planning and administration without requiring prior staff review.

3.

Approve the approach that permits ac+ivities, including withdrawals of funds, before the approval of a decommissioning plan provided the licensee provides an appropriate justification to the staff 60 days prior to the initiation of the activity or funds withdrawal, and the staff does not prohibit such withdrawal.

2In talking informally with several licensees, the staff understands that most licensees expect to spend from $1 million to $3 million for completing decommissioning plans and for immediate post-shutdown administrative expenses.

The $5 million amount therefore is based on a "best-guess" estimate, but is small enough not to significantly deplete the decommissioning trust.

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COORDINATION:

OGC has no legal objection to these policy recommendations.

mes M.

ylor

~xecutive Director for Operations l

Enclosure:

Letter to H. T. Tracy, Yankee Atomic Electric Company dated April 16, 1993 Commissioners' comments or consent should be provided directly to the Office of the Secretary by COB Wednesday, June 2, 1993.

Commission Staff Office comments, if any, should be submitted to the Commissioners NLT Wednesday, May 26, 1993, with an infor-mation copy to the Office of the Secretary.

If the paper is of such a nature that it requires additional review and comment, the Commissioners and the Secretariat should be apprised of i

when comments may be expected.

DISTRIBUTION:

Commissioners OGC OCAA OIG OPP EDO SECY

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UNITED STATES

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NUCLEAR REGULATORY COMMISSION n

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April 16, 1993 j

Docket No.50-029 Mr. H. T. Tracy Vice President, Treasurer and Chief Financial Officer Yankee Atomic Electric Company 580 Main Street Bolton, Massachusetts 01740-1398 j

SUBJECT:

DECOMMISSIONING FUNDS (TAC N0. M85897)

By letters dated March 5, March 25 and April 8, 1993, Yankee Atomic Electric Company (YAEC) requested that they be permitted to use funds in the decommissioning trust fund before receipt of NRC approval of the Yankee Nuclear Pcwer Station Decommissioning Plan. These funds would be used only for the removal of the four steam generators, pressurizer, and reactor vessel internals.

The Commission issued a Staff Requirements Memorandum dated January 14, 1993, that enables the staff to permit, on a case-by-case basis, the licensee to use its decommissioning' funds for certain activities notwithstanding the fact that its decommissioning plan has not yet been approved by the NRC.

In regard to such use of decommissioning funds, the staff evaluated the proposals in the March 5 letter and the additional information in the March 25 and April 8 letters, regarding maintenance of the funds at an adequate level during component removal.

The staff criteria and evaluation of each are provided in the enclosure.

The staff concludes that the licensee will maintain the decommissioning funds at an adequate level throughout the component removal program discussed in the first paragraph of this letter.

Therefore, the staff des not object to the proposed use of decommissioning funds for these activities.

Sincerely, q

Morton B. Fairtile, Sen or Project Manager Non-Power Reactors and Decommissioning Project Directorate' Division of Operating Reactor Support Office of Nuclear Reactor Regulation

Enclosure:

As stated cc w/ enclosure:

See next page

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Ms. Jane M. Grant Yankee Rowe Docket No. 50-29 i

cc:

Dr. Andrew C.'Kadak, President Chairman, Franklin County and Chief Executive Office

- Commission Yankee Atomic _ Electric Company 425 Main Street 580 Main Street Greenfield, Massachusetts 03101 Bolton, Massachusetts 01740-1398 j

Executive Director o

Thomas Dignan, Esq.

New England Conference of Publ.ic R. opes and Gray Utility Commissioners j

One International Place 45 Memorial Circle Boston, Massachusetts 02110-2624 Augusta, Maine 04330 i

Mr. N. N. St. Laurent Citizens Awareness Network-1 Plant Superintendent P. O. Box 83 Yankee Atomic Electric Company Shelburne Falls, Massachusetts 01370-

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Star Route Rowe, Massachusetts 01367 Resident Inspector Vermont Yankee Nuclear Power Station J

Regional Administrator, Region I U.S. Nuclear Regulatory Commission l

U.S. Nuclear Regulatory Commission P. O. Box 176 475 Allendale Road Vernon, Vermont 05354 i

King of Prussia,-Pennsylvania 19406 Robert M. -Hallisey, Director Radiation Control Program Massachusetts Department of Public Health i

305 South Street Boston, Massachusetts 02130 Commissioner Richard P. Sedano i

Vermont Department of Public Service 120 State Street, 3rd Floor Montpelier, Vermont ~05602 i

Mr. Jay K. Thayer i

Vice President and Manager

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of Operations Yankee Atomic Electric Company 580 Main Street i

Bolton, Massachusetts 01740-1398 i

e Mr. David Rodham, Director

-ATTN: Mr. James B. Muckerheide

-Massachusetts Civil Defense Agency j

400 Worcester Road P.-O. Box 1496

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Framingham, Massachusetts 01701-0317 l

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ENCLOSURE CONSIDERATIONS FOR STAFF APPROVAL OF YANKEE ATOMIC ELECTRIC COMPANY (YAEC) RE0 VEST TO WITHDRAW DECOMMISSIONING TRUST FUNDS PRIOR TO NRC APPROVAL OF YAEC DECOMMISSIONING PLAN In its Staff Requirements Memorandum dated January 14, 1993, the Comissiun has authorized the staff to approve withdrawals by a licensee from its decommissioning trust fund on a case-by-case basis before NRC approval of the decommissioning plan.

Such withdrawals may be allowed demonstrates that it has met the criteria listed below.jf the licensee Yankee Atomic Electric Company (YAEC) compliance with these criteria is evaluated below:

1.

The withdrawals are for legitimate decommissioning activity expenses as defined in 10 CFR 50.2 that would necessarily occur under most reasonable decommissioning scenarios.

10 CFR 50.2 defines "decomission" as meaning "to remove (as a facility) safely from service and reduce residual radioactivity to a level that permits release of the property for unrestricted use and termination of license."

Staff Evaluation:

YAEC presented the Yankee component removal plans in its letter dated March 5,1993, which supplemented the YAEC letter of January 12, 1993. YAEC proposes to remove core internals, steam generators, and the pressurizer from the plant. These components contain radioactivity; therefore, such removal is a decommissioning activity consistent with the definition of decommissioning contained in 10 CFR 50.2 and would be required under most acceptable decommissioning scenarios.

Based on the above, the staff concludes that YAEC has complied with this criterion.

' The Staff Requirements Memorandum (SRM) dated January 14, 1993, set forth the fundamental factors that a licensee would have to satisfy prior to beginning decommissioning activities (as defined in 10 CFR 50.2) before NRC approval of the decommissioning plan.

The SRM would allow any decommissioning activity "that does not -- (a) foreclose the release of the site for possible unrestricted use, (b) significantly increase decommissioning costs, (c) cause any significant environmental impact not previously reviewed, or (d) violate the terms of the licensee's existing license (e.g., OL, POL, OL with i

confirmatory shutdown order etc.) or 10 CFR 50.59 as applied to the existing license." By letter dated March 29, 1993, the NRC asked YAEC to submit its evaluation of items (b) and (c), and to describe how it will implement the 50.59 process in the shutdown condition. The NRC also indicated it would notify YAEC when the review of information showing how Yankee meets the applicable criteria is completed. YAEC has complied with factor (b) by indicating that NRC approval of early fund withdrawals will not violate the three criteria discussed herein. The staff review of the remaining factors will be completed before scheduled component shipments in late September 1993.

The licensee states that early withdrawal of the funds is needed to initiate the process. The staff can take appropriate action if the reviews are unsatisfactory.

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The expenditures would not reduce the value of the decomissioning trust below an amount necessary to place the reactor in a safe storage condition if unforeseen conditions or expenses arise (for example, if the waste shipments were rejected by the disposal site and had to be returned to the licensee).

The licensee would be required to document the rationale for this minimum amount.

Staff Evaluation:

YAEC provided this information in its March 5th letter.

In a subsequent letter dated March 25, 1993, YAEC certified to and provided documentation for the minimum amount needed should unforeseen circumstances arise.

YAEC estimates this amount to be $3 million and has supported the rationale for this estimate; it is based on a worst-case scenario involving a forced return of the steam generators and pressurizer to the Rowe site after having been shipped to Barnwell, South Carolina. The bulk of this cost

($1.58 million) is for the return shipment and subsequent construction of an onsite storage facility at Rowe for these components.

Included is a conservative 50% contingency allowance of $1 million.

The staff accepts these amounts based on an analysis contained in NUREG/CR-0130, Technology, Safety and Cost of Decommissioning a Reference Pressurized Water Reactor, when applied to a reactor of the size of Yankee Rowe. Also, funds needed to maintain the facility in a safe storage condition are currently available to the licensee without the need for trust fund withdrawals. The staff expects that these funds will continue to be available in the future. Thus, YAEC has met this criterion.

3.

The withdrawals would not inhibit the ability of the licensee to complete funding of any shortfall in the decomissioning trust. The licensee would be required to document the effect of the withdrawals on the decomissioning funding plan.

Staff Evaluation:

YAEC estimates the cost of the proposed component removal activities to be approximately $30 million as stated in a letter dated April 8, 1993.

During component removal, from April 1993 through June 1994, YAEC will collect about $33.1 million in the decommissioning trust fund; thus, the fund will grow by about $3 million.

In addition, during this interval, interest payments to the fund will be significant. The fund balance is projected to never be less than $74.6 million, its present value, at any time during or after the componen't removal process.

In addition, in a July 25, 1990 certification letter, YAEC stated that its ownership agreement with the utility owners of YAEC obligates these owners to pay their proportionate share of decommissioning expenses. This obligation was confirmed and funded in a March 18, 1993 Order issued by the Federal Energy Regulatory Commission. The order provides for rate increases to cover decomissioning costs. The YAEC stockholder owners are authorized to increase their rates to the ratepayers to i

cover monthly installment payments into the decomissioning trust for a total i

of $28 million annually for 3 years. Thereafter, from 1996 to 2000, the stockholder owners are authorized to collect sufficient funds from ratepayers to accumulate a total of $235 million in the decomissioning trust fund. This amount includes funds for an on-site dry cask spent fuel storage facility and return of the site to greenfield conditions. Since these two activities are not considered to be decomissioning under the NRC's definition in 10 CFR 50.2, the $235 million total funding will exceed NRC funding requirements by

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) about $50 million.

Even if the $235 million fund were reduced by $30 million l

to $205 million, the YAEC decommissioning fund sould still be sufficient to cover NRC-required decommissioning activities.

I Based on the above and on a chart provided with the January 12, 1993 letter, the staff concludes that contractually mandated contributions from the stockholder owners will enable the decommissioning trust fund to retain sufficient funding to meet NRC requirements when final dismantlement commences; therefore, YAEC complies with this criterion.

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